Rapid expansion of the budget hotel business network Premier Hotel this is facilitated by the “accelerating decline” of the UK’s lesser independence hotelsits owner White bread said today.
The company said the independents’ struggle for survival had created a “favorable market backdrop” that gave “increased opportunities for Premier Inn to increase market share”.
The company has raised its target for total Premier Inn rooms to 125,000 from 110,000, with around 2,000 new rooms to be added to its portfolio by the end of the financial year.
Whitbread said: “The decline of the independent hotel sector is accelerating… we believe that total room supply is currently around 4% lower than it was before the pandemic.”
The firm posted pre-tax profits of £307m in the six months to September after making a loss last year. Sales more than doubled to £1.4bn.
The company said growth in London was strong, while new pricing options and discounts for business customers helped demand remain stable.
Whitbread chief executive Alison Britten said the business had “proved its resilience in previous downturns”. However, the company warned that profits could fall in the second half of the year as inflationary pressures hit margins.
Whitbread shares fell 2% to 2,557p in early trade.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “It’s no surprise that costs are rising, but Whitbread’s strong balance sheet provides some cushioning and the interest income from its cash assets provides something of a buffer.
“The strong momentum in UK hotel bookings continued in the third quarter and Whitbread is in a better position than many of its peers. It won’t be immune to a prolonged downturn, but we think it has enough resilience to come out the other side.”
https://www.standard.co.uk/business/premier-inn-expansion-helped-by-fast-decline-of-smaller-hotels-whitbread-b1035019.html
